HEG LIMITED Vs. STATE ELECTRICITY BOARD

JUDGEMENT

(1.) CHALLENGE in this writ petition is made to the action of the respondents in levying 7% Surcharge as per Clause 5 of the Tariff Notification dated 29.6.1996, on the electrical energy wheeled out from the petitioner's Captive Power Plants. Seeking a direction for quashing the said action and a mandamus commanding the respondents to refund the entire amount collected towards 7% Surcharge without giving credit of the wheeled units, this writ petition is filed. 2- Petitioner M/s HEG Limited claims to be a Company incorporated under the Companies Act, 1956 and manufacturing Graphite Electrodes. For the said purpose, the Company has established a Factory, which is located in Mandideep, District Raisen. 3- Respondents/Electricity Board is a Body Corporate established under the provisions of the Electricity Supply Act, 1948 as it was existing prior to coming into force of the Electricity Act, 2003.

(2.) IT seems that the petitioner company had certain establishment in Tawa, District ITarsi and in District Durg (now in the State of Chhattisgarh). For the purpose of meeting the power requirement of the petitioner's establishment and finding the power purchased from the respondents Board to be not adequate, petitioner/company decided to install its own Captive Power Plants in Tawa and Durg respectively. Accordingly, proceedings were initiated for seeking permission in this regard in accordance to the provisions of Section 44 of the Electricity Supply Act, 1948. Respondents issued letters - Annexures P/1 and P/2, on 13.7.1994 and 18.5.1994, granting permission on certain conditions as is stipulated in these letters. The conditions stipulated in these letters were in accordance to the Captive Power Policy formulated by the State Government. As per the conditions prescribed it was stipulated that supply from the Power Plant would be primarily used for the Units at Tawa and Borai respectively and the excess energy generated would be wheeled through the Board's transmission system to the Graphite Division located at Mandideep. IT was clearly stipulated that under no circumstances should the power be sold to any other consumer or any other works of the petitioner's establishment in the State. IT was further stipulated that petitioner/company shall pay to the Board wheeling and banking charges for utilizing Board's transmission system. The wheeling and banking charges were payable as per the rates, terms and conditions as may be prescribed and for which a separate agreement would be entered into. Similar conditions are stipulated in the Captive Power Policy of the State Government, which is available on record as Annexure R/2 and in the said policy the wheeling charges are contemplated under Clause 7. Petitioner having accepted the conditions, a wheeling agreement was entered into between the petitioner and the respondents/Board. The said agreement is available on record as Annexure P/3. Two separate agreements were entered into - one for Tawa Hydel Project and another for the Durg Project. The agreement was in accordance to the Captive Power Policy of the State Government and in the Agreement under Clause 1 and under Clause 3(a), certain conditions were stipulated with regard to feeding the electricity generated at Tawa Hydel Station and Borai Station into the power system of the Board through 33 KV Double Feeders so also a provision for installing of meters to record the electricity supplied from the Tawa Hydel Station into the Board's system and also to measure the electricity purchased from the Electricity Board. Separate readings were to be maintained and the calculation was to be done in the manner contemplated under Clause 6 (a)(i) of the Agreement - Annexure P/3. 4- In pursuance to the said agreement, the petitioner started using the electricity generated from its Captive Power Plants after paying the wheeling charges and the bills were being paid during the period February 1997 to February 1999. In the meanwhile, the tariff for supply of electricity underwent a change and on 29.6.1996 a Tariff Notification was issued, which is filed as Annexure R/2 and in Clause 5 of the Appendix to this Notification, it was stipulated that 7% Surcharge shall be payable by a consumer. Even though the Tariff Notification was issued on 29.6.1996, it seems that between February 1996 to February 1999, no surcharge on the units of power generated by the Captive Power Plants was imposed. In March 1999, a revised bill was issued wherein a demand was made for payment of 7% Surcharge on the electricity generated from the Captive Power Plants of the petitioner's establishment and used at the Mandideep Factory, demand was made retrospectively with effect from February 1997. Petitioner represented and protested against the said demand and submitted a representation - Annexure P/5 on 4.2.1999 and came out with a case that on the power generated from the Captive Power Plants of the petitioner's establishment no surcharge can be levied. Referring to Clause 5 of the Tariff Notification, it was stated that surcharge can be levied only on the power purchased from the Board, the matter was kept pending and after the claim was rejected, the dispute was referred to the Board level Dues Settlement Committee and the Dues Settlement Committee also rejected the claim of the petitioner vide Annexure P/11 on 27.7.2000, thereafter, this writ petition has been filed.

(3.) SHRI M.L. Jaiswal, learned Senior Advocate appearing for the respondents, took me through the documents available on record; the meaning of the word 'surcharge' as explained by the Andhra Pradesh High Court in the case of The Associated Cement Companies Limited Vs. Andhra Pradesh State Electricity Board, AIR 1997 AP 142; and, certain principle laid down by the Supreme Court in the case of M/s Bisra Stone Lime Co. Limited and others Vs. Orissa State Electricity Board and another, AIR 1976 SC 127; and, Tata Power Company Limited Vs. Reliance Energy Limited and others, (2008) 10 SCC 321, to argue that the surcharge of 7% is being imposed strictly in accordance to the Tariff Notification - Annexure R/2 and the conditions stipulated in Clause 5 thereof, and as the petitioner is required to pay the surcharge in accordance to the aforesaid provision, he submits that there is no illegality in the matter. It is pointed out by him that a Three Member Dues Settlement Committee consisting of Experts having assessed the claim of the petitioner and have rejected it, now, no case is made out for interference.